The debt ceiling battle: Where things stand on a vote
House Speaker John Boehner arrives at the Capitol Friday morning.
July 29th, 2011
09:47 PM ET

The debt ceiling battle: Where things stand on a vote

The federal government has four days left to raise the nation's current $14.3 trillion debt ceiling, the Treasury Department said. A failure to do so will risk an unprecedented national default.

If the debt ceiling is not raised by Tuesday, Americans could face rising interest rates and a declining dollar, among other problems.

As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Some financial experts have warned of a downgrade of America's triple-A credit rating and a potential stock market crash.

Without an increase in the debt limit, the federal government will not be able to pay all of its bills next month. President Barack Obama recently indicated he can't guarantee Social Security checks will be mailed out on time. Other critical government programs could be endangered as well.

Where do things stand in the fight to raise the debt ceiling?

House

Senate Democrats on Friday blocked the latest House Republican proposal to cut spending and increase the federal debt ceiling, setting up a weekend of negotiations to seek a deal that would avoid a potential federal default next week.

Earlier Friday, House Republicans passed Speaker John Boehner's latest proposal, overcoming opposition from Democrats and tea party conservatives. But Democrats had vowed to defeat it in the Senate, where they have the majority.

Boehner's plan calls for $917 billion in savings over the next decade, while creating a special congressional committee to recommend additional savings of $1.6 trillion or more. It would allow the debt ceiling to be increased by a total of roughly $2.5 trillion through two separate votes. The $2.5 trillion total would be enough to fund the federal government through the end of 2012.

The plan originally called for a congressional vote on a balanced budget amendment to the Constitution by the end of the year. Boehner has since reached out to disgruntled conservatives by amending the plan to require congressional passage of such an amendment as a condition for raising the debt limit by the full $2.5 trillion, according to two GOP congressmen.

The vote was scheduled to have taken place on Thursday night, but Republican leaders postponed the vote amid signs they did not have enough support to pass it.

Senate

Senate Majority Leader Harry Reid's plan would reduce federal deficits over the next decade by at least $2.2 trillion while raising the debt ceiling by $2.7 trillion. Reid has promised additional cuts will be included in the final version of his legislation - enough to meet the GOP's demand that total savings should at least equal any total debt ceiling hike.

Reid's plan would cut spending by $1.8 trillion. Roughly $1 trillion in the savings are based on the planned U.S. withdrawals from military engagements in Afghanistan and Iraq.

Reid's plan also would establish a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee's proposals would be guaranteed a Senate vote with no amendments by the end of this year.

Reid said Friday morning that he "must take action" on the Senate's legislation by the end of the day.

Obama

Obama has endorsed Reid's plan and threatened a veto of Boehner's plan. The president strongly opposes any bill which doesn't raise the debt ceiling through the 2012 election. Obama has promised to veto any short-term debt ceiling extension unless it paves the way for a "grand bargain" of more sweeping reforms and revenue increases.

On Friday, Obama urged Senate Democrats and Republicans to take the lead in congressional negotiations. He said the House GOP plan "has no chance of becoming law." Obama also urged Americans to keep contacting members of Congress in order "to keep the pressure on Washington."

The president made a nationally televised plea for compromise Monday night, though he also criticized Republicans for opposing any tax hikes on the wealthy.

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Filed under: Budget • Business • Economy • Finance • Politics
soundoff (748 Responses)
  1. tpipe

    Oh here we go again, you dreamers state the president is the only adult working on this. He won't allow a short term fix, he can't have any of this debate lingering so he can get re-elected. If this man was truely who you think or wish he was he would do whatever it takes to fix the issue he has multiplied and plans on making even larger. But instead he is a poor leader and promise breaker (all debates on C-span, no lobbists et all).

    July 29, 2011 at 1:47 pm | Report abuse |
    • troutmaskreplica

      A short-term fix is just plain stupid - like this entire manufactured crisis - and calling for it isn't any less political than what you claim the president is calling for.

      July 29, 2011 at 2:05 pm | Report abuse |
    • maggie

      Get off your partisan horse, will ya? Irrespective of which plan is adopted, a short term fix will only serve to prolong an uncertain market, not just here but globally. Remember the first priority? Jobs?

      July 29, 2011 at 2:07 pm | Report abuse |
    • Chumlee

      This is America and a communist state, the president role is different than that of the house. What you want the president to do is the reponsiblity of the house. Stop blaming him. You are acting like a child.

      July 29, 2011 at 2:07 pm | Report abuse |
    • antif1313

      Right, so we can do this again in 6 months. You need to start thinking and demand action from your congressmen.

      July 29, 2011 at 2:08 pm | Report abuse |
    • Shawn Davis

      America a communist state?

      Ugh. I hope education isn't cut any further. Look what is happening.

      July 29, 2011 at 2:18 pm | Report abuse |
  2. PSAP

    The National Passport Center in Portsmouth, NH has nine assistant directors. Each make about $120K and receive health care, life insurance, and retirement courtesy of the American tax payer. If they show up for work, they usually spend time surfing the web and reading emails.

    July 29, 2011 at 1:48 pm | Report abuse |
    • Chumlee

      44% goes to tax so the ferderal government gets it back. Left with 52,800 this manager will pay property tax, gas tax, excise tax, user fees and like for a tune of 20%. Now left with 42,240 he will pay mortgage, rent, vacations, car allowance, food , clothing etc.... he would be left with $10,000 for savings if lucky. The point is this guy and other's like him keeps the economy going. One the other hand the lazy, uneducated, the illeagals are the real draw in the economy.

      July 29, 2011 at 1:57 pm | Report abuse |
    • maggie

      Sort of like you do at your job? Seriously, where do you get your stories?

      July 29, 2011 at 2:08 pm | Report abuse |
  3. Hawkeye1010

    A deal will get done before the deadline. This is just posturing. Then life will go on, as usual... with morons leading this country into a cesspool of destruction.

    July 29, 2011 at 1:49 pm | Report abuse |
  4. RobinMtl

    As a proud canadian, my heart goes out to all americans caught in this crazy crossfire of TP / GOP vs DEMS. Wish your government would be able to compromise and settle issues witouht playing a dangerous game of chicken. It makes me wonder what happened to your great country that I've visited from coast to coast years ago and met wonderful people who did not seem to be so divided as in this present moment in history.

    I was very happy when Obama was elected. It seems to me that he nowhas a big target on his back and is blamed by the right for every problem in the US economy. Many internationally are convinced that the decline of the american empire started when Bush Jr took office. Hope you'll eventually be able to come together and move forward in a new era of cooperation and prosperity.

    Good luck and warm regards from Montreal, Qc Canada.

    July 29, 2011 at 1:52 pm | Report abuse |
    • Shawn Davis

      Warning to Canadians. Start building a fence of your own. The Republicans aren't finished destroying this country yet.

      July 29, 2011 at 2:05 pm | Report abuse |
    • CalmDog

      Canada is a beautiful country also. I've been there many times. Your only problem is where you live. The people next door are nuts.

      July 29, 2011 at 2:13 pm | Report abuse |
  5. coy4one

    Does anyone look at the possibility that the Republicans WANT to see the US default. If the government defaults, the Republicans can boast that the Democrats were responsible for the default. IF the economy defaults, regardless of the perils Americans have to suffer through, it levels the political playing field. It would then be a "he said, he said" campaign and the chances of Republicans gaining ground would be better than if there is a compromise now and a default is avoided. Don't assume at this point that logic plays into this political game. The Republicans are desperate, and because they are backed by big business and special interests, they would fare better in a collapse. That's my opinion.

    July 29, 2011 at 1:52 pm | Report abuse |
    • Shawn Davis

      Yeah, I think that has been mentioned a few thousand times already. You figured it out for yourself if you haven't been watching the commentary.

      July 29, 2011 at 2:07 pm | Report abuse |
    • maggie

      That is an unfortunate truth. The earlier McConnell plan was designed specifically to dump the whole enchilada onto the president; no surprise that it got nowhere. I hear these guys talk and it makes my stomach turn. Any economist will tell you this mess was years in the making. While Obama may have made a few wrong turns, he added to some pretty hefty ones that were already there. Bush and his sidekick came into the white house with Republican majorities in the House and Senate. It stayed that way for 6 of his 8 years in office. In that time, he went on a tax cutting spree, an expensive prescription drug program and launched not one but two wars that he told us would be quick victories. The American taxpayer is now stuck with funding two utterly useless wars on top of it all. That anyone, Democrat or Republican could have fixed this mess in 3 years time was a foolhardy idea. Just as foolhardy as the Tea Party "hobbits" who showed up out of nowhere, have been in the job for 6 months with no previous governing or financial experience other than their own checkbooks and think that they can execute world change with the flip of a switch. Anyone who elects these bozos next time deserves the misery they get out of it.

      July 29, 2011 at 2:14 pm | Report abuse |
    • ChadyJ

      Thats a great idea....

      July 29, 2011 at 2:19 pm | Report abuse |
    • Citizen Tony

      Good point but everyone involved, every single politician, federal, state and local are to blame. They are elected to serve the people but instead they serve themselves and their special interests. After all, what is a poor politician to do when they aren't re-elected. Get a job? It's no wonder they aren't in the private sector. They would have long since run their company into the ground while protecting their own personal interests. The government should go back to doing what we elected them to do, provide a safe, secure environment where we, THE PEOPLE, can thrive. Our government and their special interest groups have been riding on the American people for too many years. Time to bring in people from private sector to run the government. Could you imagine if all of the politicians had to get jobs, have annual performance reviews and subject them to employment at will?!

      July 29, 2011 at 2:25 pm | Report abuse |
  6. gjoseph

    The idea of a balanced budget is great, but what happens when we have a crisis- like Hurricane Katrina? What do you cut from the budget in order to help families in a disaster like that? Balancing the budget is easier when there are no wars or disasters,, but to permanently mandate that could be dangerous!

    July 29, 2011 at 1:53 pm | Report abuse |
    • troutmaskreplica

      That's why it's a bad idea. Sounds good, but really isn't. The fed gvt budget is entirely different from a family budget when it comes to borrowing. It's a sensible thing tom do (within limits)

      July 29, 2011 at 2:08 pm | Report abuse |
    • Concerned

      Any truly thought out balanced budget amendment will include provisions for natural disasters, wars, and other unforeseen tragedies based on ones we have seen in our history's past. If for some reason, something comes along that must be addressed by not in the wording of the amendment, then what? Not like this type of scenario hasn't happened before.

      July 29, 2011 at 2:44 pm | Report abuse |
  7. gjoseph

    Raise the debt ceiling, and keep the debate about the budget going....They are two separate things!

    July 29, 2011 at 1:55 pm | Report abuse |
  8. Joe

    Increase taxes on the poor people for a change. They get all this free money handed to them and only get taxed 10% on it. Meanwhile, those of us that earn our money are taxed at 35%. But apparently, it's our job to bailout his voters.

    July 29, 2011 at 1:59 pm | Report abuse |
    • Shawn Davis

      You're talking out of your #$#.

      The average marginal tax rate in the US right now is 15% up to $34,500. It goes to 24% up to 84K. The rich pay 10% or less (the same rate as the very poor.) This happens because the very wealthy typically make their money off of inheritance (estate taxes - eliminated last year by Bush/Republicans) and capital gains (taxed at 10%.)

      You would tax a poor struggling family more to allow Paris Hilton and the Hearst girls (and the army of the idle rich like them) to continue living as socialites?

      July 29, 2011 at 2:16 pm | Report abuse |
  9. JackAlias

    Look at the Social Security Trust Fund and all you will find is trillions of dollars in IOUs. They stole the funds from the American workers to help car makers, banks, wall street, foreign governments and don't forget the subsidies to the poor oil companies. Our elected officials are going a great job folks!

    July 29, 2011 at 1:59 pm | Report abuse |
  10. krazgeo

    W inherited a surplus. No president is perfect, but at least Clinton left us with a balanced budget and a surplus. W wanted revenge for his father. Like a teen-aged cowboy, he galloped off to Iraq and Afghanistan thanks to bad intelligence. Borrowing from our kids to go to war TWICE.....can you believe THAT???? Then, later, without proper oversight and due to massive greed, big banks went berserk, causing the housing crisis, which caused the recession. Then W starts up a huge recovery wasting more money "saving" the banks, but basically just rewarding the CEOs with more millions.

    This is what Obama inherited. He could have handled it better, but hindsight is always 20/20. I dare ANYONE out there to start from where BO started and do anything better.

    July 29, 2011 at 2:01 pm | Report abuse |
    • S1N

      I hate W. as much as the next guy, but your statement has no basis in fact. There has been a federal deficit since the Andrew Jackson presidency. The Clinton years (and Congress at the time) managed to receive more money than it spent. They NEVER paid off the entire deficit, or even a sizable portion of it. Granted, the unchecked spending sprees of the last decade were a terrible idea, but at no point during the last century were we completely debt free.

      July 29, 2011 at 2:12 pm | Report abuse |
    • Jason

      S1N you should read the entire post before commenting krazgeo said that we inherited a Budget Surplus from Clinton and a balanced budget. He never said anything about Clinton paying the deficit.

      July 29, 2011 at 5:09 pm | Report abuse |
  11. Mark-Canada

    The old folks in congress seem to live in a world of there own? Let's hope for the world economy, that their scotch & martini lunches will be shorter this week so that they can understand understand what there doing!
    Next week they can go back to sleep!

    July 29, 2011 at 2:06 pm | Report abuse |
  12. morgan painter

    More money to spend on programs engineered to keep people enslaved to the government teats.

    Less spending is the answer you doofuses.

    The house ended the Vietnam war by shutting off the money spigot. No money, no more Vietnam war.

    It can do the same for this latest spending spree.

    The only hope the people have of getting this runaway government under control is to get full control of the house where spending bills originate. For that we need a party of real, everyday, working class people who know you can't borrow your way out of debt. People who understand you cannot continue to spend more then you bring in.

    The GOOOH party wants Sally the waitress, and Joe the mechanic, and Eddy the shoe salesman, and George the baker to be sitting IN the house of representatives after the next election. They know this wasteful spending cannot continue. They know that when taxes are raised, they have less money to spend so they stay home more, spend less, do less, and the economy all around them slows down. It is the same with government policy.

    Raise taxes and people have less to spend, the economy tanks. Why is that so hard for some people to realize? Continued spending mixed with higher taxes is the perfect way to ruin the best country on earth.

    OH MY! It just occurred to me, maybe that was the plan from the start.

    You voters better get your head of the sand and look at what is facing this country.

    Obamba wants to guarantee there is enough money to carry his spendocrats through to the next election. Clever fellow. He thinks he can buy votes. Why not ACORN made it work?

    Don't buy it. There is enough money in the SS fund to pay all those receipts which will help keep the country running because the people who need it most usually spend every penny.

    I dread the consequences of a default but maybe by drawing a line in the sand this nonsense can be brought to a sensible, screeching halt.

    Obamba will try to blame others but if he vetoes a bill that would have prevented default I am certain the American people will not be fooled by his rhetoric.

    Scotty, beam me up, I can't find any intelligent life down here.

    July 29, 2011 at 2:10 pm | Report abuse |
    • Concerned

      Draw the line. No gain without pain. Since neither existing plan makes a true dent in the deficit, it needs to be re-addressed sooner than later. Pass either plan as long as the length doesn't exceed 12 months. Regarding what will happen if the we have to visit this again in 6 months? Who knows, only guesses from severe to not severe? Never been there before, have we?

      July 29, 2011 at 2:30 pm | Report abuse |
    • Gaston

      Oh my how sad your so confused Obama in office < 4 years the problem has been here for longer than that.. How can you honestly blame a man that was born into this mess like everyone else

      July 29, 2011 at 5:08 pm | Report abuse |
  13. Keith Turek

    I so disgusted with the Richpublicans. They need to start taking their anti-psychotic medicines before getting on TV & blathering nonsense.

    July 29, 2011 at 2:10 pm | Report abuse |
  14. david

    Both parties know the ONLY real conflict holding up either proposal is the length of time the debt ceiling runs! R wants it to run short term & D wants it to run beyond the next election. REALLY?! You monkeys are ruining the credit rating of the USA playing politics with time?! Some stewardship of our country!

    July 29, 2011 at 2:11 pm | Report abuse |
  15. Chumlee

    Take your head out of your a*s fool , may be you'll see better.

    July 29, 2011 at 2:13 pm | Report abuse |
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